Just when it seemed that UBS AG was regaining its feet after the financial crisis, Kweku Adoboli has thrown the Swiss bank back into turmoil.

The $2.3 billion loss the London-based trader allegedly managed to accumulate will make things difficult for the bank's wealth management business, recruiters said. "They were just getting their sea-legs," said recruiter Mindy Diamond, president of Diamond Consultants LLC. "They were almost becoming a go-to firm, but not anymore. I can't imagine an adviser seriously considering making a move to UBS now."

The embarrassing loss is a major hit to the firm's reputation, said recruiter Mark Elzweig, president of Mark Elzweig Co.. "The asset management business is about managing risks in volatile markets. People will ask: 'If they can't manage their own risks, how can they manage mine?'" he said.

UBS wealth management had been on a roll, Elzweig said. The management team of Robert McCann and Robert Mulholland was highly regarded and the firm reputedly was offering the best recruiting deals in the industry. The adviser ranks, after falling from nearly 8,000 down to almost 6,000 after the financial crisis, have come back up in the last two years. "UBS was definitely on an upswing. They had popular leaders and they were paying a lot," Elzweig said. "In the short term, it will come to a halt."

The scandal also may lead at least some advisers to leave the firm, Diamond suggested.

"For advisers that hadn't left, but were thinking about it, this is an opportunity now for them to say to clients, 'This is why I need to leave the firm,'" she said.

"Mr. McCann and Mr. Mulholland have acknowledged that this is frustrating for financial advisers, but they are committed to making this the best wealth management business in the United States," said UBS spokeswoman Karina Byrne.

On Monday, UBS chairman Kaspar Villiger and acting chief executive Sergio Ermotti sent a memo to U.S. employees assuring them once again that the firm is not for sale. This came after the announcement that CEO Oswald Gruebel would resign.

"We want to reassure you that wealth management at UBS has a global footprint and is a core pillar of the firm's integrated business model. The continued success of our Wealth Management Americas business is essential to maintaining that footprint and helping achieve our strategic vision. Again, this business is not for sale."